Systems of innovation: Describe the key differences between National/Regional systems of Innovation and Triple Helix2. Describe how Quadruple and

05 May Systems of innovation: Describe the key differences between National/Regional systems of Innovation and Triple Helix2. Describe how Quadruple and

Posted at 01:23h in Business & Finance by

Answer the following questions about the systems of innovation:

1. Describe the key differences between National/Regional systems of Innovation and Triple Helix

2. Describe how Quadruple and Quintuple Helix add on the Triple Helix framework

Slide 1

ENT202 / Innovation: Strategies and Systems

Week 3: National and Regional Systems of Innovation

College of Business and Law

Karmen Lužar

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Slide 2

Recognition of Traditional owners and Indigenous cultures

Charles Darwin University acknowledges the traditional custodians of the land on which we’re meeting and pays respect to Elders both past and present and extends that respect to all Aboriginal and Torres Strait Islander people.

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Slide 3

Defining National Systems of Innovation (NSI) • Innovation is the key driver for economic growth in

developed countries.

• A key element to competitiveness in the knowledge based economy is ''interconnectedness“ = linkages.

• NSI = all economic, political and other social institutions affecting learning, searching and exploring activities. This includes a nation’s universities and research bodies, financial system, its monetary policies, and internal organisation of private firms.

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Slide 4

‘National’ in NSI

• National: limits or boundaries of the nation.

• The elements of shared culture, territory and devolved ad- ministrative and/or political organisation provide important dimensions of the institutional setting for innovation and other relevant policy development.

• Countries also differ in the degree of cultural diversity and the degree of political centralisation.

• Within NSIs there are more or less developed Regional Systems of Innovation (RSIs).

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Slide 5

NSIs with regions – examples

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Slide 6

‘National’ in NSI cont.

• Knowing NSI allows governmental policies to support and not impede the innovation processes.

• Diverse NSIs, and they work differently. – The need to avoid naïve copying and instead develop a realistic understanding of the workings of the “real market economies” in relation to innovation.

• Performance: consideration for allocation of limited resources, adaptability of the system, labour force. The performance indicators of NSI should measure the efficiency and effectiveness in producing, diffusing and exploiting economically useful knowledge. E.g. patents.

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Slide 7

‘System’ in NSI

• Systematic: comprising of elements of consequence to in- novation and relationships amongst them.

• These relationships involve users and producers of new knowledge exploited for practical (including commercial) use.

• Interaction is a dynamic social process, involving feedback at different points in the innovation process including knowledge development, diffusion and deployment.

• Learning is a central activity of the system of innovation.

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Slide 8

‘System’ in NSI cont.

• 2 angles:

a) An innovation system in abstract modelling terms includes key organisational elements and linkages between them.

– University research, research institutes, technology-transfer agencies, consultants, skills-development organisations, public and private funding organisations and, of course, firms, large and small, plus nonfirm organisations involved in innovation are the main elements of a system.

– Linkages can be specified in terms of flows of knowledge and information, flows of investment funding, flows of authority and even more informal arrangements such as networks, clubs, fora and partnerships.

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Slide 9

‘System’ in NSI cont.

• 2 angles:

b) Edquist ( 1997) has tended more towards the study of operational systems.

– Accounts of actually existing elements and relationships to determine the extent to which they constitute systems on the assumption that the interactive model supersedes the linear model of innovation in practical, operational terms.

– Massive complexity of researching this at national level -> scaling down to regional profiles.

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Slide 10

‘Innovation’ in NSI

• Innovation: a key element in a national economic growth.

• In pre-industrial societies: innovation = extraordinary events, temporary disrupting the equilibrium.

• In modern capitalism, innovation is a fundamental and inherent phenomenon. This posits an ongoing process of learning, searching and exploring, which results in: • New products and processes;

• New forms of organisation;

• New markets.

• As such innovation can be regarded as a “new use of pre- existing possibilities and components.”

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Slide 11

‘Innovation’ in NSI

• Innovation as a process.

• Interactive learning and collective entrepreneurship are fundamental to the process of innovation.

• Economic structure and institutional set-up form a framework, and affect process of interactive learning, which sometimes results in innovations.

• Innovations can be of technological or non-technological nature, and also differ in terms of novelty and impact.

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Slide 12

Friedrich List (1841)

• The National System of Political Economy

• First systematic and theoretically-based description of NSI

• Focus on development of productive forces

• Indicated the need for government’s responsibility for education and training, and for developing an infrastructure supporting industrial development

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Slide 13

Christopher Freeman (1987)

• Japan as an economic superpower

• The first explicit use of the concept ‘NSI’

• The concept refers to nation-specific organisation of subsystems and the interaction between sub-systems

• Focus on the interaction between the production system and the process of innovation

• Theoretical application of organisation and innovation theory, i.e. which organisational forms are most conducive to the development and efficient use of new technology

• Key concepts: • Organisation of R&D • Organisation of production in firms • The inter-firm relationships • The role of government

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Slide 14

Richard Nelson (1987)

• US system

• Combined private and public character of technology

• The role of private firms, government and universities in the production of new technology

• Different industry sectors use different methods to appropriate benefits from their innovations

• Focus on the production of knowledge and innovation (innovation system in the narrow sense)

• Theoretical focus on law and economics, i.e. how well can different institutional set-ups take into account and solve public-private dilemma of information and technical innovation

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Slide 15

Michael Porter (1990)

• 4 determinants affecting competitiveness of a national industry: • Firm’s strategy

• Factor conditions

• Demand conditions

• Supporting industry

• Constellation of these determinants is a system, and the system most strongly works on a national, rather than international/global level.

• National systems as environments to single industries involved in international competition.

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Slide 16

Bengt-Åke Lundvall (1992)

• Based on the Danish IKE-group work (studying industrial development and international competitiveness of the Western world)

• Focus on interactive learning and innovation

• 2 fundamental assumptions:

1) Knowledge is the most fundamental resource in the modern economy. Learning is therefore the most important process.

2) Learning is predominantly interactive/socially embedded process, which cannot be understood without taking into consideration its institutional and cultural context.

– affected by the internationalisation and globalisation

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Slide 17

Bengt-Åke Lundvall (1992) cont.

• NSIs differ because economies differ in terms of structure of the production system and institutional set-up Histories, language and culture will be reflected in: • Internal organisation of firms (e.g. sales, production and R&D)

• Inter-firm relationships (i.e. competition, user-producer co- operation)

• Role of the public sector (user of innovations->regulations)

• Institutional set up of the financial sector

• R&D intensity and organisation (resources, competencies and structure)

• Acknowledges the importance of a national education and training system, but does not develop the concept further

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Slide 18

NSI definitions

• …set of institutions which are more directly concerned with scientific and technical activities (Freeman, 1992).

• …the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies (Freeman, 1995).

• …the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge … and are either located within or rooted inside the borders of a nation state (Lundvall, 1992).

• … a set of institutions whose interactions determine the innovative performance … of national firms (Nelson, 1993).

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Slide 19

Regional Systems of Innovation (RSI) • Different institutional settings will be likely to give rise to

distinctive conventions or forms of collective social order leading to the establishment or enhancement of different kinds of organisations and even microconstitutional regulation.

• This 'social capital' determines the posture and direction of practical action and hence the evolutionary processes of the region.

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Slide 20

Types of regions institutionally

• Regional evolution in institutional terms:

1. Cultural regions: have evolved distinctive governance structures within a state, but have not officially become states. E.g. the Basque Country, Scotland.

2. Administrative regions: some degree of policy making and political capacity. E. g. Australian states, Länder in Germany.

• Two key processes underlying the designation of regions: regionalisation (Hadjimichalis, 1986) and regionalism (Harvie, 1994).

• Three key institutional forms crucial to RIS capacity to facilitate systemic innovation at regional level: financial, learning and productive 'cultures’.

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Slide 21

Regionalisation vs. regionalism

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05 May Systems of innovation: Describe the key differences between National/Regional systems of Innovation and Triple Helix2. Describe how Quadruple and

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